Norway’s Plugin Market Share Drops, BEVs Still Growing

Norway, the leading country in the electric transport transition, saw a rare annual drop in plugin electric vehicle share in July 2022, to 83.0% from 84.7% year on year. Full electrics grew share modestly (70.7%, from 64.1% YoY) by plugin hybrids lost share (12.3%, from 20.6%). The overall auto market was down 31% in volume YoY, to 7,247 units. The Skoda Enyaq was Norway’s best selling vehicle in July.

July’s combined plugin share of 83.0% comprised 70.7% battery electrics (BEVs), and 12.3% plugin hybrids (PHEVs). These compare to 64.1% and 20.6%, respectively, YoY.

The YTD shares now stand at 78.3% BEV and 9.6% PHEV, up from 58% and 25% at this point in 2021. BEVs are obviously still growing at a healthy clip in Norway, but overall plugin growth is being hit by PHEVs’ relative decline, and a continuing lack of BEVs at the economy end of the market, where consumers still buy new plugless vehicles.

For example, plugless hybrid sales have been continuing along at low but steady volumes in 2022 (averaging 560 per month). Toyota’s Yaris and RAV4 models both mainly sell in plugless hybrid form, seeing 440 units and 166 units, respectively, in July (ranking 3rd and 10th of all autos).

The Yaris, at around €28,000, keeps selling well because it has few fully compelling BEV (or PHEV) alternatives at its price point yet (see last month’s report for a fuller discussion), that can work for one-car households. BEVs need to step into these price points to continue their fast growth.

Another reason for July’s negative result was the relative paucity of BEV deliveries (rather than demand), coming after a modest push in June to boost Q2’s performance. The picture should improve markedly in September and December.

Top BEVs in Norway

Norway’s best selling BEV in July was the Skoda Enyaq, finally breaking through after having been runner up several times over the past year. The win was somewhat hollow, coming mainly due to every other model’s weaker-than-normal volumes. Indeed, the Enyaq itself (654 units) was nowhere near last month’s volumes (1024 units).

The Volkswagen ID.4 was close behind, taking second place, with the Hyundai Ioniq 5 taking third (a whisker ahead of the MG ZS).

YTD leader, the Tesla Model Y was at the low ebb of Tesla’s quarterly delivery logistics in July, but will be back to strength in September.

The Tesla Model 3, which has been consistently either leader or runner up from 2019 and 2021, is only back in 10th place over 2022 YTD. This may be mostly due to Shanghai production pauses during H1 (and prioritization of Model Y), and partly due to being mildly cannibalized by its younger sibling. The Model 3 will likely improve its ranking somewhat by year end.

The MG ZS had its strongest month in ages (268 units), though still short of its peak in August 2021 (338 units). Its newer sibling, the MG5, is still ramping in Norway, and had a record month (86 units), just scraping into 20th spot for the month.

The VW ID.5 continues to ramp deliveries (227 units), since commencing in May, and still has room to grow.

The other monthly grow story was the still ramping Renault Megane, in 26th spot. It saw its first noticeable volume in July (46 units) and will likely climb well inside the top 20 over the coming couple of months.

Monthly performances are often erratic due to the vagaries of shipping schedules, so let’s take a step back and look at the 3-month trailing scorecard:

The Tesla Model Y leads, still just ahead of the VW ID.4, though is 17% down on volume compared to the February-to-April period. That’s mostly due to the temporary Shanghai production pauses mentioned above, and will recover throughout the remainder of 2022.

The ID.4 meanwhile has increased volume 57% over the previous period, but remains in second place, as before. The other notable improvements over the past 3-months are:

Outside the top 20, the Cupra Born climbed from 45th to 28th and is still ramping deliveries. It may appear in the top 20 before the end of the year.

If some models climb the ranks, others must fall. The notable ones are:

Outside the top 20, XPeng took a timeout, with both the G3 and P7 models barely shipping (59 units combined from May to July) compared to previously (346 units). This may be due to awaiting a software refresh, and is likely only temporary.

XPeng’s 2022 European volume (currently essentially limited to Norway) has already overtaken (481 units) its full year 2021 performance (474 units).

For folks wondering, I’ll try to get an updated Norway fleet update out in the next week or so.

Outlook

The road traffic council’s (OFV) director has commented on the country’s auto market in recent days:

“Many have expected a noticeable slowdown due to production and delivery challenges, which in turn are linked to the war in Ukraine and the pandemic that is still raging… There will likely be more speed in the delivery rate of new cars beyond the autumn, and it is important to remember that the low registration rate is primarily linked to a lack of new cars that have arrived in the country and are ready for delivery.” (Solberg Thorsen, OFV director, machine translation)

Thorson goes on to note that economic conditions are also a challenge — “with war and a pandemic, the conditions are different this year. In addition, we are experiencing general price increases on several fronts, we have extraordinarily high fuel and electricity prices, and interest rates are on the rise.”

However, the relative energy prices still strongly favour plugins over non-plugins. The relative demand is there, the waiting lists are long, but BEV deliveries were at a low ebb in July, and may not recover until September.

As I’ve tried to hammer home many times, there must also be more BEV offerings (and fully compelling ones) at the economy end of the market, if plugless vehicles like the Yaris are to be replaced. There are few signs of this happening yet (where are you BYD?)

What are your thoughts on the further evolution of Norway’s auto market? Please jump in to the discussion below.

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